Q4 Amazon Ad Strategy: AdDiego Panel Experts Share Best Practices

With Q4 rapidly approaching, utilizing advanced advertising strategies on Amazon will be pivotal for a strong finish in 2018.

Although some of the biggest shopping days like Black Friday and Cyber Monday are months away, retailers should already be testing, gathering data about their audience, and building out creative.

“We’re here discuss how to prepare your campaigns and be ready for Q4. We want to make sure you are prepared to get the most out of the increased traffic that we’re going to see in Q4, specifically as it relates to your Sponsored Products advertising efforts.”

Pat Petriello, Head of Marketplace at CPC Strategy

 

It’s pretty straight forward – when Q4 hits, there won’t be any time to test strategies or theories. Sellers who don’t have a clear Amazon ad strategy leading into Q4 won’t maximize their ROI.

To help sellers prepare, we gathered the top performing Amazon advertisers together for an exclusive panel at AdDiego 2018.

If you missed the conference, here’s a recap (straight from our LIVE panel) on how you can capitalize on the channel throughout the holiday shopping season.


 

Meet the Amazon Expert Panel:

Jordan Berry,  (Moderator) & Lead Marketplace Channel Analyst

Tanya Zadoorian, Sr. Marketplace Channel Analyst at CPC Strategy

 

 

Stuart Dooley, Sr. Marketaplce Channel Analyst at CPC Strategy

 

 

Jen Acosta, Sr. Amazon Marketplace Channel Analyst

 


 

Q. What is your biggest concern heading into Q4 2018?

 

 

Stuart: The two things that stand out the most to me the most are timelines and budget. For example, how much of your budget do you save for Black Friday or Cyber Monday? Discussions about timeline and budget need to be happening NOW so you can iron out those details ahead of time.

 

 

Tanya: Another concern we hear is – which promotions should I run? I work with clients to make these decisions and we usually base it off of prior experience.  For example, what was the traffic like for a Lightning Deal, or promotion from last year (and did it work)? It’s also an opportunity to decide if it’s time to incentivize a better promotion than last year.

 

 

Jen: Building off of what Stuart said, another big concern is – How do I allocate my Q4 budget towards my holiday specific brands or product launches? Or, how much do I dedicate to my existing catalog?  How you decide to allocate your budget is definitely going to be depended on the goals that you have set out for each of your products.

Q. What advice can you offer on budget allocation & promotions?

 

 

Stuart: I think touching on previous high volume / traffic periods like Q4 2017 or Prime Day 2018 and structuring your budget set points off of that is a great start. But keep in mind – it’s only the start.

When we look at how a budget is tracked over the course of a day, the majority of your competitors (if they are tight on budget) are going to run out of their budget towards the end of the day.

Essentially, what this means is traffic is cheaper towards the end of the day. If you can maintain a budget that covers the entire day – that’s huge. Of course, we understand that’s not always an option for every seller.

Another option is to segment budget based on specific time periods you want to be more aggressive for (including Black Friday and Cyber Monday). Don’t forget about the promotional push period prior to these dates. The reality is, you need to drive awareness before Black Friday or Cyber Monday.

Although we typically see decreases in conversion rates the week before Black Friday sales, you still want to get as many eyeballs on your product as you can the week prior so you can capitalize on those high volume shopping days.

Jen: My advice is to pick your battles. Ideally, you want to promote your entire catalog, but not everyone has access to an endless budget. During the Q4 holiday, you can expect to see an increase in CPCs and you want to be prepared for that from a budget standpoint throughout the day.

Earlier in the day, there’s more traffic and competition coming to the site, so you want to be very strategic about which products you would like to promote and the timing of those promotions – all of that will play into the bigger picture of budgeting.

Q. How can sellers stay competitive, especially in high traffic categories like Beauty or Toys?

 

 

Jen: Part of that depends on when your brand / product entered the Marketplace. For example, is this a historical campaign filled with lots of relevancy? Or, are you launching a brand new campaign a couple days before Black Friday and you’re wondering why you have such high CPCs?

My advice is to leverage your historical campaigns the best that you can. Why? Because they’ve already built up that relevancy. For example, during Prime Day a lot of the campaigns that we considered “successful” had been running for quite some time.

If you do have newer campaigns, we recommend launching those as soon as possible so you can start to ramp up.

 

 

Tanya: You should also keep in mind – “How can I protect my brand”? The bigger the brand, the bigger the brand awareness. Make sure you set aside enough budget to protect your branded space. At CPC Strategy we refer to this technique as “defensive campaigns”.

Another tip is to focus on longtail keywords. For example, instead of going after the keyword “protein”, try bidding on the term “organic protein” instead.

Even though that long tail keyword might not have as many searches – it will have a lower CPC. It will also likely have a better conversion rate because it’s a little more niche.

 

Q. What are some strategies you are testing to set your clients up for more “nonbranded” success?

 

 

Tanya: One strategy that we consider “low hanging fruit” is retargeting via Amazon Media Group (see notes on the recent Amazon rebranding).

We typically see a good ROI via this program, so you may want to consider running AMG retargeting campaigns and using AMG to drive “awareness”.

For example, if you have a featured “holiday bundle” and you want to drive awareness, you may want to consider using AMG’s “In-Market” segments. Although it’s not going to have the highest ROI – it will help to grow your customer pool and if they don’t make a purchase you can continue to retarget.

 

 

Jen: I agree, AMG is a great way to build the top of the funnel (to drive awareness) and help fuel your bottom of the funnel purchases. But it’s also about timing, and AMG isn’t neccessarily for everyone.

I think there’s a lot of missed opportunity within AMS that brands might not be leveraging. You essentially want to fully exhaust every ad opportunity in AMS before taking it to the next step with AMG. Although, I will say: AMG retargeting does have a strong ROI.

 

 

 

Stuart: One component that you should always be testing is your ad copy. Product Display Ads and Sponsored Brands (formerly Headline Search Ads) are the only ad types that let you choose the messaging for the customer.

For Sponsored Brands, I like to run an A/B test heading into Q4 to determine exactly which ad copy is going to work the best. Unless you know exactly what’s going to work – you are essentially stuck taking a shot in the dark.

 


 

Q4 Amazon Ad Strategy: 2018 Best Practices

To build off of what our experts shared above, here’s a go-to checklist you should keep handy as you prepare your Amazon advertising campaigns for Q4 this year.

1) Leverage Amazon Prime Day Data

It should come as no surprise that Amazon Prime members recently enjoyed the biggest global shopping event in Amazon history.  Although the majority of sellers hope for a spike in sales on Prime Day, there is equal value in understanding why some campaigns failed to perform.

Advertisers can leverage Amazon Prime Day data by looking at strong (and weak) performance among products, campaigns, specific keywords, and ad groups.

amazon prime day

That way you can see which products performed efficiently. You can also use this data moving forward to make optimizations.

For example, although nobody enjoys product returns or reading through painful feedback, this “failure” also provides an opportunity to learn more about your customers and make adjustments to improve the shopping experience.

“You can use this kind of data to make optimizations and better communicate the value of your products to shoppers in Q4. This is only going to help you be more efficient in your organic sales results and advertising efforts going forward,” Petriello said.

“Leveraging all the data from Prime Day, making note of it, and being able to use those learnings for this coming Q4 will be huge.”

Take Action:

    • Analyze strong (and weak) performance among products, campaigns, specific keywords, and ad groups.
    • Identify return products & analyze negative feedback.
    • Optimize your product copy / images and take a closer look to determine where content is not clear or needs improvement.

 

2. Plan Inventory Accordingly

Post Prime Day is also a good time to figure out how effective your inventory launch process is and if it needs refinement or sophistication.

For example, did you overstock and now you’re facing those unwanted longterm FBA storage fees? Or maybe you ran out inventory too quickly?

Either way these are signals that you need to advance your inventory planning strategy prior to the holiday shopping season.

 

 

Running out of stock prior to the peak holiday season, especially for an extended period of time, can have a devastating impact on your organic rank. The last thing you want to see is a seller lose their ranking and visibility when the holiday season hits because of inventory issues and miscalculated inventory planning.

Take Action:

  • Take the time to formulate a Q4 strategy that incorporates promotional strategies and forecasts sales projections.
  • Ensure you have proper inventory coverage for all of Q4 and January of Q1.

 

3. Test Ad Copy, Bids, & Keywords

Leverage Q3 and the first month of Q4 to test ad copy, bids levels and keywords to help flesh out top performing targeting and content so you can maximize your click and conversion potential when it really counts at holiday time.

This will help mitigate the risk of lost opportunity when it matters the most for a lot of product categories.

Most products are not optimized for maximum sales. For example, how do sellers know if their pricing is correct or which image performs best? The bottom line is unless you test, you just don’t know.

 

“Sellers should have a fully optimized listing on Amazon because there is a direct correlation between a good listing and increased profits,” Andrew Browne, Co-Founder of Splitly, an Amazon AB testing service said.

Take Action:

  • Start AB testing ad copy, bids, keywords, images, and price NOW. For example: Test different images as your Main Image to see which generates the most clicks.
  • Gather and interpret all testing data prior to Q4.
  • Implement changes based on AB testing results, so you can be prepared leading into the holiday shopping period.

 

4. Implement Rich & Relevant Content

Content is king when it comes to selling online.

While ecommerce thrives on the convenience value proposition, it will always struggle when competing with the B&M shopping experience that allows a customer to physically touch, test and experience the product prior to purchasing.

With that said, the product experience has come a long way over recent years on Amazon where new Enhanced Brand Content (EBC), video, and Amazon Store features help enrich the brand and shopping experience through more visually appealing and interactive content.

That is why it is critical to make sure the images, copy and reviews that live on your detail pages are fully optimized and that you are leveraging all of the tools Amazon offers you in the form of video, EBC or A+ to help give the customer the confidence to click that “add to cart” button.

The more visually appealing your detail pages are, the higher your chances of standing out from competition and increasing your conversion rate becomes.

 

Example of Premium A+ content for “Jack Black” skincare.

 

Take Action:

 

5. Build Sponsored Brands to drive traffic to your Amazon Store

If you’re not familiar, Sponsored Brands (formerly referred to as Headline Search Ads) are an extremely valuable advertising placement to help drive traffic and raise product awareness located at the top of the SERP.

Sponsored Brands can send traffic to:

    • Amazon Store
    • Category Page
    • Product Detail Page

 

Example of how a “Sponsored Brands” ad drives traffic to an Amazon Store.

Amazon introduced Sponsored Brands for Third Party Sellers in Seller Central. (Previously, SB ads were only available to Amazon Vendors through Amazon Marketing Service.)

The Sponsored Brands ad type is the only advertising feature within Amazon’s search ad platform that allows you to control both the main image and copy.

Sellers and Vendors should take full advantage of this and make sure they are using images and copy that is relevant to the exact keywords you are targeting.

Take Action:

  • Create Sponsored Brands. (Keep in mind, the ACoS for Sponsored Brands is typically a little higher than other ad formats.)
  • If your product has multiple uses, then create separate campaigns with specific keywords and content that is directly speaking to each feature.
  • The headline and text in your ad copy should match the keywords that are the MOST important for your product.
  • Get creative with the images and incorporate holiday themed messaging / photography that will resonate with the customer and appeal to the holiday shopping needs.

 

6. Utilize Lightning Deals

An Amazon Lightning Deal is a promotion with a limited number of discount offers on an item for a short period of time. Products that are featured in Amazon’s Lightning Deal spaces typically enjoy a bump in sales throughout the duration of the deal.

According to CPC Strategy’s Amazon Team, although the seller sacrifices profit in the form of the discount, it is a great marketing tool for raising awareness around a product and/or brand.

Amazon Lightning deals are not new and have become even more expensive and competitive since they were first introduced several years ago. However, they are still a very powerful tool that sellers should be taking advantage of during the holiday season.

While the main benefit they offer is increasing sales velocity on your selected product(s), they also provide very low cost impressions (cost of a Lightning Deal) and brand exposure to the thousands of shoppers that are scrolling through Amazon’s highly visited deal pages.

We have found that these campaigns provide a great way for new customer acquisition and allow sellers to get their products in front of prospects that are not necessarily performing an in-market search query but still have purchase intent if the deal is compelling enough.

Take Action: 

  • Find out if you qualify for Lightning Deals
  • To create a Lightning Deal, from the Advertising drop-down menu, click Lightning Deals and select the Create option. You can select from top deal Recommendations directly from the Create page.
    • Pro-Tip: Deal recommendations appear based on several factors, such as sales and customer browsing trends. At this time, only deal recommendations are potentially eligible for Lightning Deals. 

 

7. Sponsored Products Q4 Prep:

Although Sponsored Products is one of the most powerful tools for driving discoverability and incremental sales for Amazon sellers, with so many levers to pull it can be difficult for sellers to know where to start.

So we decided to compile a list of specific Sponsored Products tactics to keep in mind this year:

      • Give all your Products a Chance to Perform – You want to give all of your products a fair opportunity to perform. This is where many sellers make the mistake of choosing products they want to perform well rather than letting the data guide them through the process.

     

      • Listen to Your Search Term Data – Use the data Amazon provides instead of making a personal decision.

     

      • Allow Sales Metrics to Catch Up – Amazon tracks clicks and spend immediately. Sales can take up to a few days to process. What this means is in the early phase of running your Sponsored Products ads you may see a lot of clicks and no conversions – which are going to result in high spend and high average cost of sale. The gut reaction to this data is that you will want to pause the campaigns because you feel like you’re just wasting spend. You don’t want to jump the gun before these products have had a chance to fully absorb the data.

     

      • Goals Will Determine Ad Group Differentiation – Once you decide what your goals are, that is when you can determine Ad Group Differentiation using advertising cost of sale (ACoS) as a guidepost. This is when you can start to weed out which products are performing well and deserve a higher bid vs. those products that are not performing well.

     

      • Optimizing Sponsored Product Campaigns with Advanced Match Types – Keyword match types allow sellers to fine-tune which customer search terms their ads may be eligible to show against. Sellers can choose from broad, phrase, and exact match types. According to Amazon, broad match keywords will give the most traffic exposure, while phrase and exact match will restrict traffic to a more precise target audience.

     

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For more on Amazon Q4 prep strategy, email tara@cpcstrategy.com

 

About the AuthorTara graduated from the University of New Hampshire with a B.S. in Journalism / Business. Her passion for creative publishing and quality reporting landed her work opportunities at several companies in Massachusetts, New York and California. She is a leading voice behind CPC Strategy’s Blog. See all posts by this author here.